What Neuroscience Reveals About Buying Decisions
How do customers assess prices during decision-making? Can our perceived value of a product be influenced by factors other than reason and logic?
Researchers at Duke University did a study to see whether consumers evaluate products in a rational manner. They asked subjects how much they would pay for a wireless keyboard. Before that, though, they asked the subjects to write down the last two digits of their social security number. Surprisingly, those who wrote down higher numbers were willing to pay 200-300% more for the keyboard than those who wrote down lower numbers. The perceived value was determined by a completely unrelated number. This finding reveals the important role of the unconscious mind in our buying decisions.
Understanding Consumers’ Decision-Making
Over the past 100 years, advertising agencies have been trying new ways to sell products and services. Some of them have worked, but many have failed miserably. Most people remember the “New Coke” debacle. Coca Cola launched a new product and spent millions of dollars promoting its new taste. The attempt was an utter failure. Consumers simply rejected “New Coke.” From Ford’s Edsel to Sony’s Betamax video recorder, costly marketing flops are easy for most people to recall.
What all marketing failures have in common is a lack of the knowledge of the consumer’s decision-making process. Neuroscientists have helped us learn what makes consumers buy, using breakthrough technology like fMRI scanning. Understanding why people decide what to do and what not to do can help businesses avoid costly mistakes. Triggering your customers’ buying decisions can drive up your sales and profits.
- How Are Most of Our Decisions Made? – We all make constant decisions every day. If we took the time to carefully think about most of them, we’d have time for little else. So, we automatically decide most things, without even realizing it. 95% of our daily decisions are made unconsciously.We don’t think long and hard about what to order for lunch. Instead, we quickly select something we’ve enjoyed in the past. We drive our cars without thinking about it. Through experience, we just drive, even though driving involves a constant stream of choices. The same process takes place on the internet, as we look for products and services to buy. We land on a website. If it doesn’t immediately draw us in, we instantly leave for another website. We don’t think about it. We just click. Our online experiences involve dozens of fast-thinking processes like that.
- How Fast Thinking Rules Our Decision-Making – Research by Nobel Prize winner Daniel Kahneman led him to categorize decision-making into fast and slowing thinking systems. The fast-thinking system uses the more primitive parts of the brain to make most decisions quickly, automatically, and unconsciously. It relies on intuition, habitual behavior patterns and emotional responses. We’re not normally aware of making those decisions. They are triggered by subtle cues that generate fear, pleasure, desire and instant recall of old memories. On the internet, such fast decisions include clicking buttons or links, leaving a website, or making a quick purchase, without our awareness.Successful Neuromarketing uses subtle triggers to stimulate such decisions.
- How Slow Thinking Helps Make Complex Decisions – For more important decisions, our brain shifts gears. It slows down and uses our analytical capability to solve problems. This slow decision-making process involves weighing alternatives and applying logical, conscious reasoning. The shift from fast to slow thinking takes place constantly. Researchers using fMRI scans can observe this happening during experimental studies. When we compare products on a website, think about the pros and cons of a decision, or calculate costs and benefits, we’re using slow-thinking to reach decisions. Triggering this shift into analytical thinking is a crucial aspect of neuroscience marketing and online conversion.Web content, both visual and textual, supplies those triggers. It also presents the information that feeds the logical mind.
- How Fast and Slow Thinking Interact to Make Decisions – Fast and slow thinking work together constantly. On a website, Neuromarketing techniques can be used to help new visitors to decide quickly to stay at the website to explore further. Then they convince the brain to engage the analytical processes to digest the information. Useful web content guides potential customers to consider options, make comparisons, build trust, and recognize social confirmation cues. The all-important conversion process involves both fast and slow thinking. If the website impresses visitors as authentic and trustworthy, it leads to a decision to act.What consumer neuroscience research shows is that most purchase decisions are made unconsciously. After all the careful thinking and comparisons, the decision to purchase or become a lead is typically made intuitively, based on emotional, unconscious factors.
- How Emotions Overpower Analysis – Most consumers take pride in careful thinking before making decisions. They do their research on websites, compare products, consider competing businesses, and think about their choices. They have a budget in mind. But what really happens when they make the buying decision? Often, they let emotions take over and make the final decision, unconsciously.For example, let’s say an online shopper wants to buy a 48″ TV for $600. After comparing features, prices, shipping cost and brands, he thinks he’s found just the right one. A purchase decision is made. Then, the shopping cart page also shows him a bigger 60″ model at a higher price point, but with free two-day shipping and a free HDMI cable. The shopper is ready to buy the smaller, less-expensive model, but he is distracted by the larger size and the free offers. In many cases, the unconscious brain takes control and makes an emotion-driven choice. Neuromarketing can guide the customer to unconsciously switch to a more profitable model.
- How to Tap into Fast and Slow Thinking to Increase Online Conversion Rates – Convincing a shopper to buy on the internet is complex. Consumer neuroscience research shows that both quick and slow thinking constantly switch back and forth during decision-making.Fast thinking is primarily involved in unconscious decisions about what to do on a website. It often triggers clicking on paid ads and search engine listings. Once a visitor arrives on a website, quick decisions control retention and navigation decisions. After the visitor begins exploring, the analytical mind takes in information, performs comparisons and decides whether to buy. A well-designed website utilizes Neuromarketing techniques throughout to engage and stimulate both thinking processes. If it is successful, conversion is the result. Effective consumer neuroscience-powered marketing will produce 100% to 500% higher conversion rates.
Power Up Your Conversion with Neuroscience
The phenomenal success of the best-known websites is due in part to applied Neuromarketing research. Over the past decade, Neuromarketing has become a primary guiding force. Although consumer neuroscience strategies may not be noticed by the average consumer, their subtle impact on sales and conversions is remarkable. Many of the recent design changes on Amazon, Facebook and countless corporate websites are powered by brain research. The effect on profitability can be dramatic.
Smaller businesses, too, are recognizing the need for these techniques. Many are trying to implement Neuromarketing on a piecemeal basis. After only spotty results, though they’re turning to the few Neuromarketing firms that specialize in neuro web design, SEO and AdWords advertising for help. These scientific approaches work best when integrated throughout an overall marketing plan.